A basic difference between the Senate and House proposals to amend the Foreign Corrupt Practices Act involves situations in which an agent -- a "third party" -- improperly gives something of value to a foreign official to get or retain business for a corporation.
Under the Senate bill, a prospective defendant is criminally liable only if he acted "corruptly to direct or authorize, expressly or by a course of conduct," the third-party's payment or gift.
By contrast, the House bill makes him criminally liable if he was "knowing," -- "aware or substantially certain" that the agent would make illegal payments, or was "consciously disregarding" of what the agent would do. He would be civilly liable for "recklessly disregarding" that the agent was likely to make unallowed payments.
The Senate bill says that if anything given to a foreign official is alleged to be a violation, "it shall be an affirmative defense" either if it is legal under his country's laws, or "if it is of reasonable value in the context of the type of transaction involved."
The House bill says the defendant must show that the payment or gift "was expressly permitted under any law or regulation of the government of the country involved." As a protection for defendants, a provision says a defendant cannot be held liable, either civilly or criminally, for an employe's or agent's violations if the corporation has put in place a reasonable system for detecting violations, and has used "due diligence" to prevent offenses.
Under the Senate bill, the burden is on the prosecutor to show that the law is violated by "any reasonable and bona fide expenditure, including travel and lodging expenses," when made to expedite or obtain "a routine governmental action by a foreign official." Under the House bill, the defendant must show that a questioned payment was made to secure or expedite "a routine governmental action by a foreign official."
The Senate bill excludes payments to foreign officials who perform "routine" functions, such as processing governmental papers or visas, but is "not limited" to them. The House bill also exempts functions, such as "loading and unloading cargoes," but narrows its reach to "actions of a similar nature."
The FCPA's accounting-standards section requires: record-keeping that reflects "accurately and fairly" and "in reasonable detail" transactions and dispositions of corporate assets and internal accounting controls to shield assets from unauthorized use, and that the firm's books conform with fact.
The Senate bill attempts to define "reasonable detail" and "reasonable assurances," while abolishing criminal liability for having "reason to know."